Shortly thereafter, the best presenter was selected, and an
implementation project put together, consisting of experienced consultants and
super users from the client. Interviews were performed and the current
processes and activities were captured, documented and translated into the new
system. As the company wanted to implement in multiple manufacturing sites and
distribution centers around the world, a template was defined for a speedy
roll-out. That template included configuration settings, master data
specifications and a lot more that made it easy for IT to plug the new system
into any of the sites out there.
So far so good. “We’re getting a new system which is
integrated, modern, sophisticated and will catapult us into the elite club of
digitalized companies out there”, was the initial consent between business
leadership and IT.
Fast forward to 5 to 15 years after Go-Live:
· The company’s IT still runs the ERP system.
·
Planning, Scheduling and Monitoring of
Production is executed in an abundance of very sophisticated spreadsheets
·
Planning and replenishment of inventories for
purchased parts in the plant and finished goods in the DC is done through
constant expediting and rescheduling of orders, because the ERP is
incapacitated by thousands of daily exception messages and an abundance of
noise and the constant beating by the bullwhip effect.
·
Every now and then another plant or distribution
center is implementing the template
·
A new culture has developed: suddenly, there are
“gurus” running the show. The gurus have figured out how that new system works from
the underbelly. They fix every problem and become the heroes of the moment. No
problem is big enough for them to not have a work-around, another spreadsheet
or a third-party solution as a quick fix. Nobody dares to question them, and
they are indispensable to the business.
·
Business runs as usual. It’s not worse and not
better than before the implementation of the ERP system. They still have
inventory problems, stock-outs and mediocre fill rates or service levels. But
they have the gurus now. And the gurus fix what needs to be fixed.
·
What’s really worrisome is the sheer number of
manual interventions necessary to fulfill customer demand on time and on
quantity, when so much money was spent on the ERP with the expectation of automation
and visibility.
On the company went and intended to implement the ERP system
in another location. However, that location was threatened by global supply
chain problems and other economic forces. Therefore, this time, leadership of
the company expected some value coming out of the implementation. That was new
and unexpected. IT had already engaged with a consultancy and the template was
already groomed and ready for roll-out. Interviews with stakeholders had
already been performed and it was clearly defined how the old processes (the
ones that produced bad results) were perfectly copied and orchestrated into the
ERP system (which was now mainly driven by spreadsheets).
This was a problematic situation. People on all levels were
confused. “Wasn’t this ERP system supposed to deliver value in the first
place?” “We implemented so many plants before. Why should we do it differently
now? It was working before. Wasn’t it? And if it wasn’t working before, why
didn’t we do anything about it?”
The most telling question, however, was the following: “We
didn’t know that a roll-out of the ERP should actually deliver value and better
results. We have always implemented to get the system up and running. And that
was always our measure of success.”
I am sure there are many companies out there who do much better,
but for those who can see themselves in a similar place, I’d like to provide
some suggestions based on our experiences and the methodologies we have
developed over the years.
This series of blogs contains 5 parts. The first one is the
problem statement you just read. Next, I’ll go into how we perform assessments
and analyze a current situation. Part 3 is all about logic trees and how
systems thinking can help turning undesired effects into desired effects. Then,
in part 4 we discuss our SAP value stream mapping and how it can help with the
realization of value. Finally, in part 5 we attempt to put the pieces together
to show how you may achieve considerable change and significant value in a
sustainable manner.
Getting Value and Results out of an ERP 2
Getting Value and Results out of an ERP 3
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